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2022 State of the City: Post-Pandemic Bright Spots But Red Ink as Far as the Eye Can See

Santa Clara is getting back to business after three years of weathering the COVID pandemic and for the first time in three years, popular community events like the Art & Wine Festival were back on the city calendar. That’s some of the good news.

The bad news is that although the City is seeing new revenues come into the general fund, the budget will remain in the red for the next few years.

Santa Clara Mayor Lisa Gillmor began her presentation with the City’s efforts during the pandemic to serve residents’ needs.


“When the pandemic first hit, we convened our City teams in programs to feed Santa Clarans in need,” she said.

Gillmor went on to describe the many COVID emergency programs in the City, including partnerships with other agencies and nonprofits.

“Together we provided almost 17,000 boxes of free food to families weekly,” said Gillmor.

“Other [groups] donated PPE and participated in our mass distribution initiative,” she continued. “We were able to provide $1.1 million dollars in small business assistant grants not loans in $5,000 to $10,000 increments”

Among the City’s new initiatives this year is a homelessness task force, which has produced some concrete results already. In April, the City began providing mobile showers and laundry services as well as meals in partnership with meals on wheels.

The City has also received about $2.6 million in federal grants over the next two years for affordable and transitional housing. The City plans to convert motels on El Camino into transitional housing and has 10 affordable housing construction projects in process for a total of 8,962 units.

In the coming year, Santa Clara will join the cities of Mountain View and Cupertino and launch a city bus shuttle, thanks to an $8.5 million transportation grant that resulted from the efforts of Council Member Raj Chahal. Chahal has been advocating for a local shuttle since he was elected in 2018 but the idea got no traction until 2021.

The City received another $800,000 grant for the new Magical Bridge inclusive playground in Central Park, thanks to help from State Assemblyman Alex Lee.

Gillmor noted the large development projects going forward in the City including the Tasman Area and Patrick Henry plans.

“We are extremely excited about the development of Related Santa Clara in our town with over one million square feet of retail, food and beverage, offices, hotels and residential units,” said Gillmor.

The City signed an exclusive negotiating agreement with Related in 2013 for the 240-acre former golf course, with an anticipated opening in 2016. So far nothing has been built, and thus, there has been no benefit to the general fund.

Next Gillmor turned to the budget deficit, saying “we do not have fast or easy fixes” for this year’s $19 million deficit. Further, the news is grim for the next few years.

“The shortfall is currently estimated in 23-24 and 24-25 at about $27 million,” said Gillmor. “The City plans to address this with a combination of strategies including the use of reserves, governance solutions and expenditure reduction in Santa Clara.”

Despite the deficit, Gillmor reported that the state auditor has rated Santa Clara’s overall risk indicator as low.

In her presentation, Gillmor omitted the single thing that will have the biggest impact this year on closing the deficit quickly: the return of concerts to Levi’s Stadium following the lifting of the weeknight 10 p.m. curfew on Stadium events. Gillmor opposed lifting the curfew, which drove the City’s direct revenue from stadium events to zero even before COVID. A very conservative estimate is that this year’s concerts and non-NFL events will bring $4 million or more into the general fund this fiscal year.

Gillmor also downplayed the settlement of seven lawsuits with the 49ers — some dating back six years — that will immediately put another $3.5 million in the general fund.

“Only time will tell if that was a prudent fiscal decision or not,” she said.

Together these two cash infusions will close nearly 40% of the budget deficit this year and 20% on an ongoing basis.

“In the coming months we will be replacing a city manager and a city attorney,” Gillmor said as she wrapped up her talk.

“We will continue our efforts to identify priorities to our City,” said Gillmor. “We will continue to navigate through the long-term impacts of pandemic and continue to work together to address economic recovery and sustaining a promising future for our residents and our businesses. I’m committed to lead Santa Clara and to navigate through any challenges that may arise. It is truly an honor and privilege to continue to serve all of you.”

If you missed it, you can watch the State of the City on the City’s website.


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